Value Stocks Lead the Way

Chart of the Week for July 2-8, 2000

During the second quarter of 1999, value stocks outperformed growth stocks, particularly in the small- and large-cap arena. The chart above shows the second-quarter returns for three well-known indexes, as well as for the Growth and Value components thereof. This performance is a marked changed from the first quarter of the year.

Technology stocks had a stellar first three months of this year. Many investors may have believed while the economy was potentially headed for a slowdown, these “dot com” companies would still drive home strong earnings amidst a booming age of e-commerce.

However, the Consumer Price Index (which measures inflation) as well as other economic indicators released early in the second quarter put some investors’ fears of a slowing economy to rest. As a result, they may have viewed a potentially strong economic environment as a buying opportunity for some of the not-so-flashy basic materials and manufacturing stocks.

Investors saw quite the opposite during the first quarter of 1999, as shown in the chart above.

This illustration was compiled by information from outside sources. These companies are not affiliated with ICMA-RC. This information is being provided for educational purposes and is not intended to be construed as or relied upon as investment advice. ICMA-RC does not offer specific tax or legal advice. Individuals are advised to consider any new investment strategies carefully prior to implementing.

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The performance data quoted represents past performance. Past performance is no guarantee of future results. Investment returns and principal value will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data illustrated. For performance data current to the most recent month end, contact ICMA-RC Services, LLC by calling 800-669-7400 or by writing to 777 North Capitol Street, NE, Washington, DC 20002-4240. Para asistencia en Español llame al 800-669-8216. Performance data current to the most recent quarter end is available by visiting www.icmarc.org.